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The company, whose brands include Oscar Mayer and Miracle Whip, also raised its 2013 earnings forecast Friday and announced that it will look to level out annual pension contributions after this year.

"The fourth quarter was one of real progress and some significant disappointment," Kraft CEO Tony Vernon told investors during a conference call Friday. "We made great strides in productivity, profit, and cash, but we really missed our topline."

But Vernon noted he feels good about the solid financial foundation for the future of the "new Kraft."

The outlook comes as Kraft, based in Northfield, Ill., looks to redefine itself after splitting last year from its global snack foods business called Mondelez International Inc. Mondelez has brands including Oreo and Nabisco. The split was intended to allow each of the companies to focus on a more targeted portfolio of products, thus accelerating growth. As part of Kraft's strategy, it's working to clean up the company's lineup of less-profitable product extensions and revitalize languishing brands like Jell-O by betting on innovations.

Kraft anticipates quarterly earnings of about 15 cents per share.

The company said its earnings included charges of approximately 24 cents per share related to its pension fund strategy, about 14 cents per share in restructuring charges and 4 cents per share in unrealized losses from hedging activities.

Excluding charges, however, adjusted earnings would be 57 cents per share. That easily tops the 23 cents that analysts polled by FactSet expected.

Shares rose 10 cents to $47.26 in morning trading,

Kraft said revenue is expected to drop 10.7 percent in the fourth quarter but didn't specify a figure. The company said the decline is due in part to the prior-year period having an extra week of sales. Wall Street's prediction is for revenue of $4.75 billion. Organic revenue was expected to decline 7.2 percent. The decline was due to the reduction in inventories related to the split from Mondelez as well as the impact from product pruning.

But Vernon also noted that sales were hurt because competitors offered lower prices in certain categories to lure financially strapped mothers. In particular, one rival, who was unnamed, pushed lower priced packaged cold cuts that hurt sales of the company brand Oscar Mayer's Lunchables. Kraft chose not to respond and it lost major market share to that rival, Vernon said. In another instance, Kraft saw a competitor come out with a lower price version of its Macaroni & Cheese. Kraft responded by stepping up its advertising and offered bonus packs.

"These are the choices we make as we roll out this playbook," said Vernon. "In hindset, I regret not responding on cold cuts exactly the way we responded on Mac & Cheese."

For 2013, Kraft now expects earnings of about $2.75 per share, up from approximately $2.60 per share. Analysts expect $2.66 per share.

Kraft said its full-year restructuring costs are now anticipated to be about $300 million, up from its prior forecast of approximately $240 million.

The company said it is implementing a four-part strategy to help better manage and lower the volatility of expenses and cash outlays related to its pension fund obligations. As part of this strategy, Kraft said that it will make a pension contribution of about $600 million in 2013. It anticipates level, annual pension contributions of about $225 million after that time. The company said that it expect the 2013 pension contribution to be funded with available cash. Future contributions are expected to be funded through cash flow from operations.

Kraft will report its final fourth-quarter and full-year results by March 29.